South Dakota Government Blog by Bob Mercer

Monthly Archives: February 2013

Unless someone steps forward to attempt to refer it to a statewide vote, South Dakota video lottery terminals soon will be able to accept bets of as little as 1 cent. The legislation was signed into law by Gov. Dennis Daugaard, according to an announcement from his office this afternoon. The law would take effect July 1. It’s one of the changes sought by the South Dakota Lottery Commission in an attempt to increase play and thereby increase revenue to the state treasury from the privately owned machines. SB 52 rolled through the Senate 30-5 but ran into tougher opposition from critics of gambling in the House, where the bill passed just 39-28. Currently a nickel is the smallest bet allowed, while the maximum is $2. The Deadwood casinos’ and tribal casinos’ bet limit is $1,000, and they already can offer penny games.

Senate Republican leader Russ Olson set the stage when he put at the top of this afternoon’s debate calendar the legislation that would expand the waiting period for women seeking an abortion. HB 1237 would remove Saturdays, Sundays and annually recurring holidays from the 72-hour period that women must wait after their first meeting with the doctor who will perform the abortion. The House of Representatives approved the bill 56-13.

The debate began at 1:55 p.m. CT. Leading the argument for the bill was Sen. Phyllis Heineman, R-Sioux Falls. She said the testimony she’s heard from women who recived abortions always contained the same thing: “Their message to us has always been the same: If only I had known.” She said the longer period is an attempt to ensure the women have the time needed to make the decision. She recalled a 2005 law that outlined what doctors must include in the informed-consent information they provide to women seeking abortion. She said the U.S. Circuit Court of Appeals last summer upheld those written disclosures and found they were in the women’s interests. Medical risks are included in those disclosures. In 2011, the waiting period of 72 hours was passed into law. Heineman said the point was to give the women time and to require third-party counseling. Now weekends and holidays would be excluded from the 72-hour calculation. “Honestly, we don’t want anyone playing games with these young women’s lives,” Heineman said. “Past experiences make us very wary.” She mentioned Planned Parenthood’s admission the 72 hours and required counseling isn’t an undue burden. Heineman asked what would happen if Planned Parenthood did all of the initial consultations on Fridays and scheduled all of the abortions on Mondays. “Don’t try to do this over a weekend,” Heineman said. “Don’t make it more difficult for this woman to get that counseling session.” As for whether excluding weekends and holidays becomes an undue burden, Heineman turned to adoption laws in South Dakota, where the waiting period is 15 days “at a minimum.” She said they are “decades-old” laws and South Dakota recognizes the relationship between parent and child.

In response, speaking fast as she often does when under pressure, Sen. Angie Buhl, D-Sioux Falls, said the bill is “ridiculous on its face.” She said 72 hours is 72 hours and the exclusions is micro-managing. “I don’t think we need to be dealing with that.” She said time is of the essence for a woman contemplating an abortion. Buhl recalled that South Dakota voters twice rejected bans on most abortions. “They told us they didn’t want us doing their work thinking about this,” Buhl said.

Heineman said, in response to a question from Sen. Chuck Welke, D-Warner, that a medical emergency is excluded from the waiting period.

Sen. David Omdahl, R-Sioux Falls, said it’s not too much to wait 72 hours and think about the decision.

Sen. Stan Adelstein, R-Rapid City, said the decision to seek an abortion is “the most difficult thing in their life.” Adelstein said weekends and holidays “have little to do” with the difficulty of the decision. He described it as “a further restriction” on women’s rights to make a decision “about their body.” He added, “Let’s not make that decision more difficult.”

Sen. Phil Jensen, R-Rapid City, said the change will provide greater access to what he described as pregnancy help centers. He said the centers are there to help and not to bully.

Sen. Bill Van Gerpen, R-Tyndall, said there are different levels of decisions. Hard decisions require time. “I need to think, I need to dwell upon,” he said. Van Gerpen said the decision in an abortion is “irrevocable” and they need time to assemble information, get advice and then think. “Give them the time to reach out to these folks, ask for counsel and advice, and then make that decision,” he said. He referred to “living DNA and a heartbeat that begins at 18 days.”

Sen. Ernie Otten, R-Tea, said he doesn’t question the heartache involved. “Humanity is one thing that bonds us together,” he said. Time is “a precious commodity” including for the volunteers, he said.

Sen. Craig Tieszen, R-Rapid City, said the time period is for crisis counseling. He said it should be done sooner rather than later. “I think this bill is moving in the wrong direction,” Tieszen said.

Sen. Al Novstrup, R-Aberdeen, asked why the rush to judgement. “Why is there a rush to get to the decision, a decision that is going to affect the lives of many?” he said.

After 21 minutes, Sen. Heineman spoke in conclusion. She thanked the women who have stepped forward to tell their stories through the years. “I appreciate the courage they have, and I appreciate the message they continue to give us,” she said.

The roll call vote for final passage commenced at 2:17.

The vote was 24-9. The bill now goes to the governor for his decision whether it becomes law.

State senators refused this afternoon to accept House amendments to SB 5 and SB 39. SB 5 would create a council on higher education policy goals, performance and accountability. It came from a legislative interim study. SB 39 would take the death penalty out of the possible punishment for a Class A or Class B felon younger than age 18 and impose a maximum sentence of life imprisonment. It came at the request of the attorney general.

South Dakota’s two U.S. senators, Republican John Thune and Democrat Tim Johnson, were on the same side of the vote Wednesday, supporting the confirmation of Jack Lew as the new treasury secretary in the Obama cabinet. Lew’s confirmation passed 71.26. They split on Chuck Hagel’s nomination as defense secretary Tuesday. Johnson voted for confirmation while Thune opposed Hagel, a former Republican senator. Hagel’s confirmation received approval overall 58-41.

UPDATE: House appropriations chairman Fred Romkema, R-Spearfish, said the schedule has indeed changed and there won’t be a decision today on an official revision of the 2013 revenue estimate and an official forecast for 2014 revenue. “We’ll adopt those Monday morning — Monday morning,” he said. A subcommittee will work this morning on a recommendation, he said.

Fred Schoenfeld, the chief fiscal analyst for the Legislative Research Council, and right-hand man Aaron Olson presented their revenue estimates this morning to the Legislature’s Joint Committee on Appropriations. Schoenfeld said they again are using the trends method, which is different than what the Bureau of Finance and Management does. “This approach has produced good results over the last couple of years,” Schoenfeld said, adding that the alternative methodologies work well. “It adds confidence to the overall forecast.” He cautioned that in an upward business cycle the LRC forecasts might be low. You’ll see in the numbers below that generally the two sets of numbers are very close, other than LRC forecasting about $5 million more in sales tax for FY14. What this means is that both sets of budget staff agree that the rest of 2013 and 2014 will be better but softer than the standard pace for South Dakota’s economy pre-recession and pre-crash. Olson described the differences between LRC and BFM generally as “minimal.” While LRC doesn’t specifically break out a number for video lottery on its hand0ut for the committee, Olson said LRC sees a 5 percent growth in video lottery for FY14; that is approximately the same as the BFM estimate.

Here’s what the Bureau of Finance and Management is predicting, as of this morning, fresh as today’s donuts, for the remainder of fiscal 2013, which ends June 30, and for fiscal 2014, which starts July 1, 2013, for the major categories of state tax revenue:

State sales and use tax — After 4.82 percent growth in FY12, reaching $744.4 million, BFM predicts FY13 growth will total 3.95 percent and FY14 growth will be 3.77 percent. The annual average for the period of 2004 through 2012 was 4.89 percent.

Contractor’s excise tax — After the big declines during the recession, FY12 saw an astounding rebound of 26.3 percent, reaching just shy of $83 million. BFM’s forecast calls for FY13 to finish with 1.45 percent growth and for FY14 to get back on a faster track at nearly 6.4 percent.

Bank franchise tax — After topping $30 million in the five previous years, FY10 saw a slump to just over $20 million, followed by a giant drop in FY11 to $4.7 million. The FY12 total was $29.7 million. For FY13 the forecast is a drop back to $22.9 million, while FY14 is pegged at $23.2 million. This isn’t a good trend.

Insurance tax — This category is a steady grower, from $63.6 million in FY11 to $65.1 million in FY12, followed by an estimated $68.5 million in FY13 and a projected $71.3 million for FY14.

Video lottery — The smoking ban and the recession delivered a one-two punch. After netting $95.8 million for the state’s property tax reduction fund in FY11, there was a drop to $87.3 million for FY12. The estimated FY13 revenue is now estimated to reach $91.6 million. Changes made in the products — new line-up games and new penny plays — are forecast to help bring the number back up to $96.2 million for FY14.

The nine senators and nine representatives who comprise the Legislature’s Joint Committee on Appropriations have gathered and the meeting on revenue estimates is ready to start. The Senate chair, Republican Deb Peters of Hartford, said last night she doesn’t know whether the committee will reach agreement today. Waiting until next week would allow three off-days for the numbers to settle in.

For the charts from the Bureau of Finance and Management, visit www.bfm.sd.gov on the Internet. “Overall moderate growth, slightly below average,” Jim Terwilliger, BFM economist, told the committee about the national outlook for the rest of 2013 and 2014. A key point is that South Dakota jobs as of December 2012 were 3,400, or 0.8 percent, below the March 2008 peak of just over 412,000. Nationally the decline was 6.3 percent during the recession while South Dakota lost about 3 percent at the troughs. “That’s just something to keep in mind as we look forward. The growth after the severe recession that we went through just hasn’t been what we hoped. It has been a slow receovery as for jobs,” he said. “We’re getting close.” He said he expects “hopefully” that South Dakota will be back to the peak by year’s end.

South Dakota was at 4.4 percent unemploment as of December 2012. He expects the rate to decrease as the economy improves during the next 18 months. “We’re still slowly coming out of it,” Terwilliger said. From 2004 through 2008, annual non-farm job growth in South Dakota ranged from 1.2 to 2.2 percent. Then came 2009’s losses of 1.9 percent and 2010’s losses of 0.2 percent. In 2011, growth was 0.7 percent. The revised number for 2012 was 0.6 percent. In 2013 the growth is forecast to be 0.8 percent, followed by 1.5 percent growth in 2014.

Crop insurance limited the economic impacts of the 2012 drought, but Terwilliger said there is concern if drought continues into 2013. Beyond agriculture, he said, the recession risk for South Dakota largely comes from beyond the state’s borders. The federal sequester, which is set to kick in the start of $85 billion of cuts throughout the federal budget, and the federal debt-ceiling debate set for May are contributing to the unease. “The uncertainty is worse than knowing if something is going to be bad. That’s holding back a lot of decisions by our businesses,” he said. Adding to the uncertainty are the European debt crises. As for the federal debt, he said, “The road we’re on is unsustainable.”

On Thursday morning, the Legislature’s Republican and Democratic leaders plan to hold a joint news conference “to discuss progress on an economic development bill during the 88th Legislative Session.” For those of you keeping score at home, Thursday is working day 32 of the 38-day session. That means the Legislature has five working days next week, followed by a two-week break and then the final day on Monday, March 25.

Undoubtedly the legislators and the governor want to propose, again, incentives and tax breaks for businesses to develop in South Dakota. Voters in November rejected the large-project grants program that Gov. Dennis Daugaard and many of his fellow Republicans in the Legislature passed. To this point, the public has seen only possible pieces of whatever is going to be proposed this time.

By contrast, the governor and the chief justice and the Legislature’s leaders combined during the past year to put together a set of major reforms for South Dakota’s criminal justice system so that more non-violent offenders can serve their punishments in their communities, receiving treatment while continuing to be part of their families and holding jobs. That bill, SB 70, flew through the Senate and the House. The big signing ceremony is already old news.

Now we will have yet another tax-break plan that the public will get to consider for perhaps as little as one week and for at most three weeks. We’ve seen some possible pieces, such as the Munsterman-Werner bill that provides essentially a sales- and use-tax reduction of 2 percent and offers assistance to economic development offices, and the wind-energy incentives bill, which would offer approximately a 2 percent tax break. We also saw the Lust proposal to provide tax incentives for data centers. But whether those are the final key pieces isn’t known.

Rep. Charlie Hoffman, R-Eureka, and Rep. Melissa Magstadt, R-Watertown, listen to testimony from Myron Rau of the South Dakota Trucking Association in favor of the texting ban Wednesday. No one testified against the proposal.

The House Judiciary Committee voted 8-5 in the past hour to block legislation that would have banned most texting while driving a motor vehicle on a highway in South Dakota. The measure, SB 142, had previously been approved by the Senate.

Janean Christensen of Brandon could only listen as the House Judiciary Committee members prepared to kill legislation Wednesday that would generally ban texting while driving in South Dakota. The committee voted 8-5 to block the proposal from Sen. Mike Vehle, R-Mitchell. Christensen had testified minutes earlier about the death of her husband, Jon, on the afternoon of their son's 13th birthday and one day before their 19th wedding anniversary. He was riding a motorcycle when he was run over from behind by a driver who was texting on S.D. 38. She and their son came upon the crash about 15 minutes after it happened in 2010 east of Mitchell.

So proclaimed Sen. Jean Hunhoff, R-Yankton, (second from left), as her brother-in-law Rep. Bernie Hunhoff, D-Yankton, sat down to testify today to the Senate Health and Human Services Committee, which she chairs. Jean is serving her 13th year as a state legislator, while Bernie is serving his 11th year. Bernie was testifying on HB 1214, an act to provide medical care to unborn children whose mothers don't otherwise qualify for Medicaid pre-natal care because they aren't U.S. citizens. The bill was approved in the House last week. Jean said the committee won't take action until its next meeting Monday.